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Utah tar sands: promise or peril?

Photos by U.S. OIL SANDS/Special to The Daily Sentienl—Bitumen, or heavy oil, is shown weeping out of rock from a core sample drilled by U.S. Oil Sands and left out in the sun on a hot day at a lease site in eastern Utah.

Mining occurs in a test pit at a U.S. Oil Sands’ lease at the P.R. Spring tar sands deposit in eastern Utah.

Clean, processed sand and other solids result from treatment at a U.S. Oil Sands pilot project in Canada. The company expects to recover about 96 percent of the oil with its process.

A resource that is undergoing intensive development in Canada is drawing renewed interest in eastern Utah, where any of a number of companies soon could become the first in the United States to produce oil from tar sands for energy use on a commercially sustainable basis.

Those efforts are attracting increasing attention for their potential promise or future hazard, largely due to how tar sands development in Alberta, Canada, has boosted energy supplies and economies while causing considerable environmental concern.

U.S. Oil Sands is aiming to have a commercial operation with a capacity of up to 2,000 barrels a day up and running by next year in what is called the P.R. Spring tar sands deposit in the Bookcliffs area north of Interstate 70. The Alberta-based company has 32,000 leased acres of state trust lands at P.R. Spring.

MCW Energy Group, another Canadian company, hopes to be producing from a 250-barrel-a-day pilot facility in the Asphalt Ridge deposit near Vernal, Utah, as soon as this September, with the possibility of ramping up production quickly to a commercial level if the funding can be obtained to allow it, said company spokesman Paul Davey.

“Of all the companies, we’re the one that’s closest to production,” Davey claims.

American Sands Energy Corp., which is based in Salt Lake City, is pursuing a project on about 1,800 leased private acres in the Sunnyside deposit east of Price. It filed in March for an operating permit with the Utah Department of Oil, Gas and Mining, and is shooting to be producing 5,000 barrels a day by 2016.

Such efforts are alarming activists including a group called Utah Tar Sands Resistance. They recently held meetings in Grand Junction to try to enlist supporters in a city they think should share their concern about tar sands development activities in eastern Utah, and about Utah oil shale projects involving Red Leaf Resources and Enefit.

“Almost all this activity is almost right along the (Colorado) border,” said Jesse Fruhwirth, one of the group’s organizers.

The kind of air and water pollution he is concerned with doesn’t respect political boundaries, said Fruhwirth, who is joined by people including Lora Davis of Grand Junction in fearing regionwide impacts akin to those related to Alberta tar sands development.

Said Davis, “I would hope we would learn from their experience and stop it before it plows us down.”

DIFFERENCES IN SCALE

But Cameron Todd, chief executive officer of U.S. Oil Sands, says comparisons to what’s occurring in Alberta are way off-base.

“There’s not enough resource in the oil sands of the United States to force the massive projects like you see in Canada,” he said.

While Utah’s deposits may contain tens of billions of barrels of oil, Canada is estimated to have trillions of barrels. Todd said Canada’s are in large-scale deposits that are conducive to large-scale development.

U.S. deposits are generally smaller and more spread out, and development projects likely would be the same, he believes.

He said the technologies used in Canada require much more energy, water and surface land than for what his company is doing in Utah, a project he believes could have regional economic benefits extending to Grand Junction.

The Bureau of Land Management, in an appendix to a 2012 environmental impact statement on land allocations for potential oil shale and tar sands leasing, notes that Canadian tar sands are referred to as “water-wet sands.” They have a layer of water surrounding each sand grain, with bitumen partly filling the voids between grains. Utah tar sands lack the water and the bitumen directly contacts the sand grains, making them “oil-wet.”

Bitumen is removed from tar sands in Canada with hot water, but the process isn’t able to strip out enough of the oil and requires tailing ponds to store leftover product while efforts to separate the oil and the water continue, Todd said. This creates environmental and reclamation issues.

U.S. Oil Sands plans to use what it says is a citrus-based, nontoxic solvent to remove virtually all the bitumen, Todd said. Tailings ponds won’t be needed, and the water is easily separated out and can be reused in the process, he said. The company expects to recycle 95 percent of its water.

Not needing tailings ponds will allow the company to reclaim surface mining as it goes, rather than later on, Todd said.

MCW and American Sands Energy Corp. likewise are pursuing solvent-based approaches. American Sands says its process requires no water.

ENVIRONMENTAL CONCERNS

“Using water to free up the tar from the sands is not really a choice out here,” said Rob Dubuc, an attorney with Western Resource Advocates conservation group.

He said water-based processing isn’t as effective for Utah tar sands, and water availability is far less than in the somewhat swampy terrain being developed in Alberta.

He recently represented his organization before the Utah Supreme Court to challenge the state’s decision that there wasn’t enough evidence of underlying groundwater for it to require U.S. Oil Sands to get a groundwater permit and monitor for potential impacts on groundwater. The court hasn’t yet ruled.

Todd said the company has the permits it needs to proceed with its project. He said it’s hard to speculate on how a court decision might change things until the company sees that decision, but he considers the issue a technicality because whatever else might be required of the company can be accomplished.

Dubuc’s concerns about the project go further, from the 100-percent disturbance of the land to surface-mine the tar sands, to the use of a solvent that is a powerful industrial degreaser, even if naturally derived.

“At full strength you could literally melt the parking lot underneath your feet, which is what they’re doing,” said Dubuc.

He worries that remaining tailings that will include at least some level of residual solvents and liberated bitumen could wash away with precipitation and threaten groundwater.

U.S. Oil Sands says 98 percent of the solvent will be recovered and reused.

Said Todd, “We’ve done everything that’s been asked and we have bent over backwards to demonstrate the most environmentally responsible oil sands project ever built.”

THE STATE’S ROLE

Dubuc said part of the difficulty in challenging projects like the U.S. Oil Sands one is that the state has leased them the lands.

Utah officials “are fine with it as long as it makes money. They feel that that’s a perfectly appropriate use of the land,” he said.

Said Fruhwirth, “Utah has it in their heads that they’ve got to be out front with this.”

Todd said the state has good tar sands deposits, is farther along in its understanding of the industry and its technology than the BLM is, and has shown progressiveness in making tar sands part of a state energy plan that balances energy needs, environmental concerns and other factors.

Altogether, the state has leased more than 54,000 acres for tar sands development, said Jerry Mansfield, a resource specialist with the State of Utah School and Institutional Trust Land Administration.

He said Gov. Gary Herbert has promoted an all-of-the-above energy strategy, ranging from wind and solar to petroleum sources. The state has a geothermal plant on state trust land and another plant draws from trust land geothermal sources. Tar sands leases are another way of adding to the potential energy mix while creating an additional revenue source.

“We’re required to pull money in from those lands for the beneficiaries of the trust (primarily schools) so we try to do that and bring the best income stream we can for those beneficiaries,” he said.

While it leases the lands, it relies on other state agencies to make sure the proper permits are in place before operations go forward, he said.

THE BLM’S ROLE

In 2012, the BLM decided to make about 130,000 acres open for potential commercial tar sands leasing in Utah. That’s down from about 431,000 acres it allocated in a 2008 decision. It also is consistent with a draft, conservation-oriented alternative it agreed to consider as part of a settlement of a lawsuit by environmental groups over 2008 land allocations for potential tar sands and oil shale leasing.

The agency’s 2012 decision is now being challenged in another lawsuit by some conservation groups over Endangered Species Act concerns.

About 9,000 acres of the BLM’s allocated tar sands acres are in the San Rafael Swell west of Green River. Dubuc said about 118,000 allocated acres are in northeastern Utah’s Uinta Basin. He said that’s because the interest in developing Utah tar sands mostly is focused on mining of deposits at or near the surface, and the Uinta is where the state’s surface deposits are centered. The alternative is to try to produce bitumen from deposits left in-place, or in-situ, underground, such as by using injection wells to somehow treat and liberate the bitumen so it can be pumped to the surface.

The BLM says less than 15 percent of Utah’s tar sands deposits may be shallow enough for strip mining.

It currently is reviewing an application for a commercial tar sands lease at Asphalt Ridge. A company called Jones Leasing Service nominated the parcel on behalf of Ocean Enterprise Group, but the BLM may offer it as a competitive lease.

CARBON CONCERNS

Taylor McKinnon, director of energy for the Grand Canyon Trust, is watching the BLM’s Asphalt Ridge proposal and others in the Uinta Basin closely. His group also is among those suing the BLM over its latest oil shale and tar sands plan.

“Committing society to high-carbon fuels like tar sands is the wrong policy direction in the face of climate change,” he said. “Tar sands, like oil shale, the per-barrel carbon emission far exceeds that of conventional oil.”

Concerns around tar sands development in places such as Canada stem from things such as the additional energy needs to mine deposits, strip the bitumen from them, and subject it to more refinery processing than conventional oil requires. The thick Alberta bitumen requires an additive simply so it can flow in a pipeline.

Jennifer Spinti, a research associate professor in chemical engineering at the University of Utah, believes as Todd does that Alberta isn’t a comparable situation due to differences in scale. But she said issues such as the concern over tar sands’ carbon footprint definitely pose challenges for the industry in the United States.

“There are a lot of social and regulatory hurdles that one must jump through and those can be difficult,” she said.

Davey, of MCW Energy Group, said Utah tar sands are more liquid and can be poured into and transported by tanker truck. U.S. Oil Sands claims a 50 percent reduction in energy use in its process compared to traditional ones, in part because of its ability to recycle heated water that must be left to cool in tailings ponds in Alberta. Todd says that with 90 percent of oil’s carbon footprint resulting from its burning by consumers, and 10 percent occurring during production, the focus should be on conservation.

Economics remains the other big challenge for tar sands development, which Spinti said all depend on future oil prices. The University of Utah recently analyzed costs for in-situ and surface tar sands and oil shale development scenarios in the Uinta Basin. It found that its surface tar sands and oil shale scenarios could operate at a 10 percent profit if the federal government’s forecasted oil prices through 2035 hold true.